Enrolled  August 31, 2024
Passed  IN  Senate  August 27, 2024
Passed  IN  Assembly  August 28, 2024
Amended  IN  Senate  August 23, 2024
Amended  IN  Assembly  April 22, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 2109

Introduced by Assembly Member Juan Carrillo

February 05, 2024

An act to amend Section 371 of, and to add Section 451.7 to, the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


AB 2109, Juan Carrillo. Electricity: surcharge exemption: industrial process heat recovery.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law, except as provided, requires certain uneconomic costs to be applied to each customer based on the amount of electricity purchased by that customer from an electrical corporation or alternate supplier of electricity, subject to changes in usage occurring in the normal course of business. Under existing law, changes in usage occurring in the normal course of business are those resulting from, among other things, the enhancement or increased efficiency of equipment.
This bill would specify that the enhancement or increased efficiency of equipment occurring in the normal course of business includes industrial process heat recovery technology that meets prescribed requirements. The bill would prohibit nonbypassable or departing load surcharges from applying to a reduction in kilowatthours of electricity that an electrical corporation customer consumes from the electrical grid in a metered interval due to industrial process heat recovery technology, up to a cap established by the commission, that meets those prescribed requirements. The bill would also require the commission, in implementing that exemption from the surcharges, to minimize the cost impacts to all nonparticipating customers that are directly attributable to the nonbypassable or departing load charges of customers using industrial process heat recovery technology, as provided.
Under existing law, a violation of the Public Utilities Act, or of an order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would be part of the act, and a violation of a commission action implementing its requirements would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Industrial energy efficiency can reduce consumption from the electrical grid and improve grid reliability.
(b) Industrial decarbonization is critical to achieving the state’s climate goals.
(c) Increased efficiency of equipment is a key component of the state’s climate strategy.
(d) Capturing and reusing industrial process heat improves the efficiency of industrial processes.
(e) The state encourages industrial customers to adopt efficiency improvements in their normal course of business.
(f) Industrial competitiveness is essential to the state economy and necessary to avoid emissions leakage.
(g) Industrial process heat recovery is a proven process at manufacturing facilities around the world.
(h) Departing load and nonbypassable surcharges reduce the incentive for a customer to install industrial process heat recovery technologies in the state.

SEC. 2.

 Section 371 of the Public Utilities Code is amended to read:

371.
 (a) Except as provided in Sections 372 and 374, the uneconomic costs provided in Sections 367, 368, 375, and 376 shall be applied to each customer based on the amount of electricity purchased by the customer from an electrical corporation or alternate supplier of electricity, subject to changes in usage occurring in the normal course of business.
(b) Changes in usage occurring in the normal course of business are those resulting from changes in business cycles, termination of operations, departure from the utility service territory, weather, reduced production, modifications to production equipment or operations, changes in production or manufacturing processes, fuel switching, including installation of fuel cells pending a contrary determination by the Energy Commission, enhancement or increased efficiency of equipment or performance of existing self-cogeneration equipment, replacement of existing cogeneration equipment with new power generation equipment of similar size as described in paragraph (1) of subdivision (a) of Section 372, installation of demand-side management equipment or facilities, energy conservation efforts, or other similar factors.
(c) This section does not exempt or alter the obligation of a customer to comply with Chapter 5 (commencing with Section 119075) of Part 15 of Division 104 of the Health and Safety Code. This section does not limit the ability of residential customers to alter their pattern of electricity purchases by activities on the customer side of the meter.
(d) Enhancement or increased efficiency of equipment, as described in subdivision (b), shall include industrial process heat recovery technology that meets the requirements of Section 451.7.

SEC. 3.

 Section 451.7 is added to the Public Utilities Code, to read:

451.7.
 (a) Nonbypassable or departing load surcharges, as defined by the commission, shall not apply to a reduction in kilowatthours of electricity that an electrical corporation customer consumes from the electrical grid in a metered interval due to industrial process heat recovery technology, up to a cap established by the commission.
(b) In order to receive the exemption pursuant to subdivision (a), the industrial process heat recovery technology shall meet all of the following requirements:
(1) The industrial process heat recovered to produce electricity is integral to the industrial process.
(2) The industrial process heat recovered to produce electricity is created by the industrial process.
(3) No supplemental firing or fuel use occurs to increase or to stabilize the steam’s temperature.
(4) The electricity generated by the industrial process heat recovery technology has zero marginal greenhouse gas emissions associated with it.
(5) The electricity generated by the industrial process heat recovery technology is fully self-consumed onsite during a manufacturing process.
(6) The electricity generated by the industrial process heat recovery technology is not exported to the electrical grid for sale into the wholesale market.
(7) The electricity generated by the industrial process heat recovery technology does not exceed 25 percent of the installing customer’s peak electrical load at the time of installation.
(8) The industrial process heat recovery technology has a minimum nameplate rating of 500 kilowatts.
(9) The industrial process heat recovery technology is installed on or after January 1, 2024.
(c) In implementing the exemption in subdivision (a), the commission shall minimize the cost impacts to all nonparticipating customers that are directly attributable to the nonbypassable or departing load charges of customers using industrial process heat recovery technology pursuant to subdivision (b).
(d) For purposes of this section, the following definitions apply:
(1) “Industrial process heat recovery” means a process that captures and reuses heat that would otherwise not be used, without any additional fuel input or supplemental firing, thereby reducing the electrical consumption of the industrial process.
(2) “Reduction” means a reduction from the baseline electrical load of the industrial process before installation of the industrial process heat recovery technology.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.